It’s a report card, which focuses more on what the health of the economy can be, if the advice given is followed.
For Finance Minister Pranab Mukherjee, it is a survey of advice. Big bang reforms are needed in practically every sector with special focus on direct taxes, disinvestment and even fiscal consolidation.
The Economic Survey has pushed the government to not just revive but, target annual receipts worth Rs 25,000 crore via disinvestment in public sector companies.
For this, the government should sell 5-10 per cent equity in non-navratnas and a minimum of 10 per cent in unlisted PSUs.
The Survey is also of the view that a return to the earlier FRBM target of 3 per cent of GDP is feasible, as early as 2010-2011.
The direct taxes should be cleaned up with the elimination of FBT, STT, CTT, the 105 surcharges on corporate and income tax payees and possibly even cesses like the 3 per cent education cess, it stated.
The Direct Tax Code should be introduced, whereas exemptions under Customs Duty should go. Instead there should be a uniform rate structure, it added.
Also, the Survey stated that the GST should be introduced without delay as this will also help in the recovery of indirect tax revenues.
Well, maximum heat has been generated by the disinvestment strategy suggested in the Survey. However, the Finance Secretary is candid that there is no disinvestment roadmap, at least so far.
But the Economic Survey does not stop here. It goes on to mention a growth forecast, for which it suggests a medium and long-term strategy.
For instance, it states that PSU banks need to be recapitalized and the government should allow voting rights in banks in proportion with equity holdings.
It also stresses that pension and insurance reforms need to be accelerated and the rigidity in cutting lending rates needs to be removed.
Besides, the Survey goes on to state that petrol and diesel prices need to be de-controlled. Infact, the survey has set a range on the growth target of near 7 per cent, of course, all depending on when the US economy bottoms out.
The Economic Survey has set out a bold reform agenda for the government, be it disinvestment, fiscal consolidation or even taxes, which will impact immediately. For this Monday is not far away, when Pranab Mukherjee will present the Budget.